CHICAGO, IL--(Marketwired - October 05, 2016) - TransUnion (NYSE: TRU) today announced the launch of its Fraud Prevention Exchange, a powerful industry collaborative designed to enhance responsible lending by helping combat online fraud. The Fraud Prevention Exchange, which includes established and emerging FinTech lenders, was unveiled at the Lend360 conference.
The Fraud Prevention Exchange will leverage the power of collective data and help lenders face challenges brought on by originations fraud, including synthetic identity and loan stacking. Rapid information sharing among Exchange members is paramount in the battle against online fraud.
The Exchange is timely because originations fraud has resulted in hundreds of millions of dollars lost each year due to fraudulent activity that can go undetected by some lenders. Loan stacking also has materialized as an emerging issue across the industry. TransUnion data show that, on average, 4.5% of borrowers take out more than one personal loan on the same day. While only some forms of loan stacking are fraudulent, the practice can be costly when inauthentic borrowers apply for multiple loans from multiple lenders within a short timeframe.
"Lenders today are spending precious resources and experiencing significant losses attributable to fraudulent customer behavior," said Pat Phelan, senior vice president in TransUnion's innovative solutions group. "The TransUnion Fraud Prevention Exchange is an innovative approach to build on the power of our existing identity solutions with the establishment of a private collaboration between a group of lenders sharing data for common interests in reducing losses."
Fraud Prevention Exchange members opt in to share transaction data during the verification process for new and existing customers, and the outcomes of those verifications. TransUnion analyzes this member input, watching for potentially fraudulent transaction activity and reported fraud across the network.
Applications are evaluated as they are initiated and as they are completed -- when it is clear a consumer has true intent to accept an offer made. They are reviewed one final time before cash disbursement is made. Contributing members are notified within seconds if their transaction data is suspect.
"As a collaborative solution, the Fraud Prevention Exchange provides a unique multi-faceted approach that can potentially help us both avoid and identify fraudsters, positively impacting both the company and our customers," said John Sun, Chief Credit Officer of Avant, an online lending platform.
Fraud Prevention Exchange Benefits
With TransUnion's Fraud Prevention Exchange, lenders can utilize collective data to strengthen existing risk systems. The Exchange enables lenders to:
- Reduce fraud losses without impacting the consumer experience and lending timelines.
- Receive real-time alerts (within seconds) to mitigate instances where lenders don't discover problematic accounts until days or weeks have passed and losses may have been incubating unknowingly inside live loans.
- Quickly adjust and adapt to evolving fraud threats and trends.
- Have protection from unknowingly funding a loan to a consumer who already exceeds recommended guidelines for the number and frequency of loans allowed.
"With the Fraud Prevention Exchange, lenders can further mitigate risk before completing a transaction," Phelan said. "Our real time alerts detect fraudulent behavior at multiple points -- when a transaction is first started, when the identity-verification process is completed and even before funds are released. As a result, both lenders and consumers will have greater certainty about fraud protection."
To learn more about TransUnion Fraud Prevention Exchange please visit http://transunioninsights.com/fraud-exchange/. Additional information about TransUnion's fraud prevention solutions can be found here.
About TransUnion (NYSE: TRU)
Information is a powerful thing. At TransUnion, we realize that. We are dedicated to finding innovative ways information can be used to help individuals make better and smarter decisions. We help uncover unique stories, trends and insights behind each data point, using historical information as well as alternative data sources. This allows a variety of markets and businesses to better manage risk and consumers to better manage their credit, personal information and identity. Today, TransUnion has a global presence in more than 30 countries and a leading presence in several international markets across North America, Africa, Latin America and Asia. Through the power of information, TransUnion is working to build stronger economies and families and safer communities worldwide.
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